Advantages of Buying vs. Leasing a New Vehicle

 Advantages of Buying vs. Leasing a New Vehicle

Written by: Jackson D. 

When you go to purchase your new vehicle, there are a lot of decisions to make.  Once you figure out what kind of car you want, then you need to decide how to pay for it,

Most people can’t walk into a dealership and pay cash for a new car.  For most people, it’s going to be either to finance the car or lease the car.  Both ways you have to pay interest on the amount you finance.  In a normal world, the interest rate would be at least 3.25%, but with the COVID-19 issue, a lot of the cars you can get for 0%.  To make my case, I’m going to use 3.25%

The difference can mean more money in your pocket depending on how you look at it.  Here is an example for a 2020 Kia Forte.

Example #1  You purchase the car for  $ 18,000 for the car, including tax and other fees

You have $2,000 to pay the dealership and will  have to finance $16,000

Purchase Price $18,000

Cash Paid (2,000)

Amount Financed $16,000

Divide by 48 months $333.33 / month base payment

Interest @ 3.25% 42.73

Total Monthly Payment $376.06

When you make all the payments, the car is yours to do what you want

Example #2  You purchase the car for $18,000, including tax and other fees

You have $2,000 to pay the dealership, and the residual is $9,000.  You only have to finance $7,000.  

Purchase Price $18,000

Cash Paid (2,000)

Residual         (9,000)

Amount Financed $7,000

Divide by 48 months $145.83 / month base payment

Interest @ 3.25% $18.96

Total Monthly Payment $164.79

When you make all of your payments, the balance due is $9,000.  At this point, you can pay the $9,000.  You can trade the car in for another car, or you can walk away.

Leasing is good for people that want a new car all the time because you only pay for how much you use it.  If you keep cars until they die, then financing is a better plan. If you're starting out and don’t have a lot of money to work with or not wanting a bank loan than leasing a car would be the way to go but if you are willing to take a loan out and know that you're gonna have that car for a long period of time and want value in the car then buying it may be the route to go on. 

Works Cited

Consumer Reports. “Leasing vs. Buying a New Car.” Consumer Reports, www.consumerreports.org/buying-a-car/leasing-vs-buying-a-new-car/.

“Leasing vs. Buying A Car - Breaking Down The Numbers.” Your Easiest Way to Lease, www.carlease.com/posts/2017/leasing-vs-buying-a-car-breaking-down-the-numbers.

Watson, Charlie. “Is Leasing A Car A Glorified Rental?” Cinci Auto News, 13 Dec. 2017, cinci-auto-news.com/2017/12/12/is-leasing-a-car-a-glorified-rental/.

 

Specialization and Economies of Scale: is there a limit?

 Specialization and Economies of Scale: is there a limit?

Written by: Ian F. 

In 1913, Henry Ford implemented his famous conveyor belt system in a Detroit automobile factory. This event revolutionized automobile production, fundamentally changing the way products are manufactured forever. But what is not often considered is the enormous change in economic theory this action caused. 

Ford’s assembly line utilizes an economic theory called specialization. While it would take a long time and a lot of skill for a single worker to create an entire car alone, it takes minimal effort to perform a single task in the manufacturing process. For a simple example, compare two factories each producing cars. One factory hires a single worker to produce cars one at a time, while the second factory hires two workers for the same task. You might expect the second factory to produce cars twice as fast as the first factory, since it has twice the number of workers. But in reality, something amazing happens. While the worker at the first factory has to complete all steps of the car making process, the workers at the second factory can divide up the work. One worker can be assigned the task of putting together the engine, while the other worker can be assigned to install the wheels. The first worker will soon become very experienced at making the engine, while the second worker will become experienced with the wheels, and they will both be able to work faster than their designated roles.

This process is called specialization. The single worker at the other factory, however, must become experienced with performing every step in the process. In this way, the second factory will produce cars at over twice the rate of the first factory, with only hiring double the number of workers. This is called economies of scale, and it is the fundamental reason why assembly lines are so efficient. On an assembly line, each worker specializes in a very specific process, and becomes very experienced with it. Because of this specialization, the factory can produce cars at a rate far faster than it could if it had the same number of workers each trying to build an entire car alone.

But what happens when we bring specialization to its limit? What if a third factory hired 10,000

workers for an assembly line? Well, just as a company can experience economies of scale during specialization, it can also experience diseconomies of scale as it faces coordination issues. To see an example of how diseconomies of scale works, watch the video below!

Video part 1: https://drive.google.com/file/d/1HsCFH5IbL2_x3IntAtwE5K6VwvBej_CM/view

Video part 2: https://drive.google.com/file/d/1JU6CCGL94cFuprMGCC8CdeAxu6mR7igb/view

Works Cited

Brock, Thomas. “Henry Ford's Assembly Line.” Omeka RSS, projects.leadr.msu.edu/makingmodernus/exhibits/show/henry-ford-assembly-line/henry-ford-s-assembly-line. 

“Henry Ford's Assembly Line.” Omeka RSS, projects.leadr.msu.edu/makingmodernus/exhibits/show/henry-ford-assembly-line/henry-ford-s-assembly-line. 

Kenton, Will. “When Specialization Matters.” Investopedia, Investopedia, 13 Sept. 2020, www.investopedia.com/terms/s/specialization.asp. 

Welker, Jason. Econclassroom.com, econclassroom.com/long-run-average-total-cost-and-economies-of-scale/. 

Eating Out vs Home Cooked Meals.

 Written by: Devyn T. 

Eating Out vs Home Cooked Meals.

Many people buy fast food because it's cheaper or it saves time, but is that really true? Today I'll be going over if you save more money eating out or cooking meals, the costs of fast food vs home meals and which is a better option for your wallet.

Home cooked meals vs restaurants

The average american family usually spends $3000 a year on eating in restaurants, the average meal cost in a restaurant is $20. Comparing that to a home cooked meal which has an average cost of $4.50. So a home cooked meal is almost 4.5 times cheaper than eating in a restaurant. So cooking a meal at home could save you over $2000 a year!

Home cooked meals vs fast food

In January 2015 a study showed that the average american spends about $1200 a year on fast food, the average american eats fast food 2-3 times a week, that's around $12.50 per meal. Overall americans spend in total $384 billion dollars on fast food a year. Comparing this to a home cooked meal, which is usually 4.50 a meal. That's almost 3 times less than fast food!

Meal Kits

Another more recent option is meal kits, meal kits are basically home cooked meals that are delivered to your house if you don't have the time to go out and buy groceries. Meal kits usually cost around $10 a meal so they are cheaper than eating out but not by much. A meal kit usually costs almost double what a normal meal would cost.

In Conclusion

A home cooked meal is far cheaper than almost any other fast food or restaurant option available.  Spending less on eating out at fast food or restaurants and saving you hundreds or even thousands of dollars a year. Thats a lot of money you could be spending on something else.

Work Cited

Emily. “Fast Food Vs Home Cooked Meals: Statistics & Cost.” ProMoneySavings, 15 Feb. 2021, promoneysavings.com/fast-food-vs-home-cooked-meals/#:~:text=Yes%2C%20despite%20a%20wide%20misconception,are%20cheaper%20than%20dining%20out.

“Fast Food Statistics: Updated March 2020.” The Barbecue Lab, 11 Mar. 2021, www.thebarbecuelab.com/fast-food/. 

“How Much Money Do Americans Spend on Fast Food?” Reference, IAC Publishing, www.reference.com/world-view/much-money-americans-spend-fast-food-597cd336a3c818fb#:~:text=As%20of%20January%202015%2C%20the,it%20on%20a%20daily%20basis. www.thebarbecuelab.com/fast-food/.

Venmo .vs. Cashapp

Written by: Makaila D. 

Deciding what financial app can be difficult with varying problems such as, fraud, usage and investment opportunities. Venmo and Cashapp are both mobile apps used to transfer and send money to friends and family. Although at first glance they are interchangeable, they both have varying services. Now, let's go through each of their problems and lastly come to a consensus of which app is the winner.

First off we will discuss the ever so happening and frightening subject; fraud. With Venmo they specifically advise against all business transactions as they do not protect against any buyer or seller protection. On the Venmo website they quote, “We use encryption to help protect your account details and store that information on servers in secure locations. On the web, “https:” and a lock next to the web address is your signal that encryption is on.” Which truly is not very strong, and easily is hackable. Whereas for Cashapp they also have encryption along with a cancellation, where you can cancel a transaction. Overall for the fraud area, Cashapp is the safer and more secure option. 

On to the topic of usage, as in versatility and requirements. For Cashapp there are more ways to pay: bank account, credit card, debit card, Google pay, and lastly Apple pay. Which is two more ways than Venmo (Google pay and Apple pay). For supported devices Cashapp wins again as they additionally support browser, Venmo and Cashapp both support iOS app and Android app. Both finance apps have no payment fee, but they do have an instant withdrawal fee. For Cashapp it is 1.5% and for Venmo it is .5% less being only 1%. 

For investment opportunities, to make it short and sweet Cashapp is better. According to Finder.com, “One of the major differences is the wide array of uses that Cash App boasts, including the ability to buy and sell both stocks and Bitcoin”. Whereas for Venmo it is more of a send and receive outlet, very similar to a wallet. 

In conclusion Cashapp is personally the better option, especially if you are looking for an online device for investment opportunities, and versatility. Thank you for reading and good luck with your decision.  

Works Cited:

“How Can You Chargeback on Cash App? [Money Saving Hacks].” DoNotPay, 11 May 2021, donotpay.com/learn/can-you-chargeback-on-cash-app/.

“Share Payments.” Venmo, venmo.com/.

Zak Killermann . “Cash App vs. Venmo: Which Is Better?” Finder.com, 15 Dec. 2020, www.finder.com/cash-app-vs-venmo#:~:text=One%20of%20the%20major%20differences,may%20be%20the%20better%20choice. 

How to Make a Budget

 How to Make a Budget

Written by: Milan G. 

Keeping a budget is undoubtedly one of the most important methods when it comes to staying on track with your money and staying financially stable. It turns out that only 3 in 5 Americans don’t know what they've spent last month along with having one-third of Americans say they regret how much they've spent according to mint.intuit.com. Managing money can be stressful for most and keeping a budget makes it more helpful and less of a hassle so here are some steps to take so you can budget!

1. Noting Income - understating the amount of monthly income you earn is needed in order to create an organized list of living expenses. Make sure to deduct when it comes to taxes, 401(k), and social security. 

2. Deciding Importance- As we all know some things are more important than others in life, this will impact your budget going forward. Things that are more important deserve more funds while less important things can be skipped.

3. Doing The Numbers- At this stage you can divide your income among all your expenses like housing, gas, phone bill, etc. Be sure to set some aside in savings though. A calculator and a spreadsheet will be helpful and don’t be afraid to look for help if you’re struggling.

4. Revisions- You might not get it right the first time so coming back to your budget to adjust the amounts you want to spend on things will help keep you surviving and thriving. Going back to fix errors will save you a whole lot of money while a bad budget will drain your pockets.

5. Sticking to It- The most important part of budgeting aside from the budget itself is to adhere to it. Saying you’ll save extra money or spend less on something is one thing, but doing so takes a whole lot more effort and will. At this stage you will have successfully planned, corrected and adhered to your budget.

As you can see from this infographic budgets are not only for personal use, they are also used by governments and corporations. This widespread use of budgeting highlights the importance of it as well as demonstrates that there careers in budgeting. The contents of this infographic when applied to the real world will have had a vast impact on society. A personal budget’s impact is also very important but not on quite as large a scale as a federal budget or corporate budget. 

I hope that in this post I have truly gotten across the importance of budgeting and how to properly do so. Going forward I wish you all good luck in your budgeting pursuits. One must properly budget lest they suffer the consequences of poor finances.  

Works Cited 

Better Money Habits. “Creating a Budget with a Personal Budget Spreadsheet.” Better Money Habits, Bank of America, 5 Mar. 2021, bettermoneyhabits.bankofamerica.com/en/saving-budgeting/creating-a-budget. 

Vohwinkle, Jeremy. “Your 6-Step Guide to Making a Personal Budget.” The Balance, 6 Oct. 2020, www.thebalance.com/how-to-make-a-budget-1289587. 

Things to look for when comparing pet insurance plans

 Things to look for when comparing pet insurance plans

Written by: Mia B. 

Since I was a child, I’ve known I wanted to get a pet when I could afford one after college. Many of you reading may even relate to the feeling. But did you know that there is such a thing as pet insurance? Don’t worry, I got you. Pet insurance is like health insurance, where it covers some or all of the cost of medical bills, but for pets. Like with health insurance for humans, not all veterinary procedures are covered by insurance and there is an out of pocket deductible to pay before coverage starts. Pet insurance is a good idea to get for your pet as a vet emergency is always around the corner. The following are things to keep in mind when comparing pet insurance plans. 

ENROLLMENT RULES:

When enrolling for pet insurance make sure to check the enrollment rules regarding your pet. Some insurance plans will not let senior pets enroll, and may require a vet visit within a year of enrollment. For example, if you are enrolling a puppy, very few things limit them from being covered and are more than likely to be covered for the rest of your pet’s life. However those who have an older dog from a shelter, may have to shop around to identify plans that don’t block older dogs. 

COVERAGE DETAILS:

When you pick an insurance plan, obviously you need an idea of what will actually be covered and what will be coming from your pocket. Refer to the policies to see what kind of incidents are covered by insurance and which ones were not. Ideally if Fido slipped down the stairs and broke a leg, you’d like some financial assistance. So make sure the plan you’re looking at would cover that. And also see what treatments aren’t covered. It’d be nice to not have to pay for the fees associated with a routine exam, but alas some insurance plans don’t do that. Not to mention some pre-existing conditions your pet may have may not be covered, as well as other exclusions. So yes, do read the policies very carefully. 

PRICING AND DEDUCTIBLES:

Obviously when looking for an insurance plan you want to compare prices. How much you spend on insurance is based on how much gets covered on the insurance, the pet’s age and breed, and the costs of vet services where you live. So ideally when comparing plans you would look at the average cost you would spend on a plan, and find a happy medium of what gets covered and what you would pay. To get an idea of how different plans can cost you here is an image below based off of a labrador retriever with no pre-existing conditions from valuepenguin.com. 

As can be seen, monthly payments can average around $42.45. Each plan differs in what they do and do not cover and that coverage does affect the price. Some of these plans cover bigger treatments, but not as many of the basic treatments which affect how much you pay. The Embrace insurance as you are able to see covers a lot of basic treatments in comparison to Figo that has much more specific treatments plans explained which helps to explain the difference in cost. Jeep in mind that individual companies do influence the pricing outside of the previously stated reasons. In addition to paying for coverage, you do have to pay deductibles, which is the amount you pay before the insurance kicks in. Some companies have you pay the deductible with each visit, and others do an annual deductible that resets when you renew the policy. Annual deductibles are honestly the better deal, so look for plans with annual deductibles. 

When comes the time you get a pet, it's important you really consider getting pet insurance and you actively compare the different plans and everything they promise to cover and ask you to pay for. Taking the time to do this research will not only help your pet stay healthy but make you feel better about potential medical emergencies. 

Works Cited

“The Best Pet Insurance Is Designed by Real Pet Parents.” Embrace Pet Insurance, https://www.embracepetinsurance.com/?utm_source=google&utm_medium=cpc&utm_campaign=Search-Brand&utm_term=embrace%2520pet%2520insurance&utm_content=expanded-text-ad&gclid=CjwKCAjwkN6EBhBNEiwADVfya3oAfKT7TYD9ZF9cnG7oB4cWdRA3NZceaecB-k4HYCWqlqwMLmEUaxoCh4kQAvD_BwE.

“Figo: Premium Health Insurance Plans for Cats and Dogs.” Figo Pet Insurance, figopetinsurance.com/?intent=brand&gclid=CjwKCAjwkN6EBhBNEiwADVfya5peIvDFf9Aditjcs71VBLVrIwLv7LXF7mkTWPj-Ll-qHyMI86ozrxoCLSQQAvD_BwE.

Marquand, Barbara. “Understanding Pet Insurance: 10 Things to Know Before You Buy.” NerdWallet, 29 Mar. 2016, www.nerdwallet.com/blog/insurance/understanding-pet-insurance/.

Wamala, Yowana. “Average Cost of Pet Insurance: 2021 Facts and Figures.” ValuePenguin, ValuePenguin, 5 Mar. 2021, www.valuepenguin.com/pet-insurance/average-cost-of-pet-insurance.

International Trade

Written by: Tiara T. 

Take a moment to look at the tags on the clothes you’re wearing. Are any of your clothing items made in the USA? Chances are, probably not. 

Our economy, whether Americans like it or not, is extremely dependent on international trade. We must sell, produce, and provide services to the world’s population if we want to keep our jobs and buy things at a reasonable price. 

What makes trade important?

1. American jobs rely on international trade. Did you know that over 40 million Americans rely on trade for their career? This could be a variety of things, whether it be for importing technology parts, oil, clothing, food. 

2. Business endeavors. According to the US Department of Commerce, “98% of the roughly 300,000 U.S. companies that export are small and medium-sized businesses, and they account for one-third of U.S. merchandise exports.”

3. Food. Have you ever driven west of Wisconsin and taken notice of how much land we have in America? Our nation is very fortunate to have lots of land for farming, and we definitely should be using that to our advantage. 25% of farm products are exported each year, which helps boost our economy. 

Many Americans wonder if our country could survive without international trade. The answer, yes-- but definitely not thrive. Although the US often claims they are energy self sufficient, that isn’t too accurate. Over 3 billion dollars a year in electricity actually flows from Canada, alongside billions in natural gas and oil. However, the US does have fossil fuels, but not enough capacity to generate the electricity with current generators. The US could invest in manufacturing more generators so we would be energy independent, but that would also cost a lot of money. 

While America does produce a huge variety of food, we would be missing out on items such as bananas, nuts, and coffee beans! Imagine not getting to have your morning coffee anymore. 

Well-known Scottish economist, Adam Smith, said back in 1776 that “wealth is determined by productivity”. You get more productive if you have division of labor-- or what Pewaukee econ classes called it--  specialization. If you have some nations specialize in making fabric, while others specialize in technology, while some specialize in farming, each nation can invest in those types of equipment and workers. This makes the global economy more productive. With trade agreements throughout the world, nations are able to get products at a much cheaper price because other countries specialize in it, thus having lots of it. When each nation specializes in their own thing, people won’t have to pay as much for their products. A shirt that we can get for $10 could easily become $50 without trade.

International trade is an important part of our economy. It ensures that we keep our items at an affordable price, and allows us to live much more luxuriously. Allowing for international trade continues the concept of specialization, a concept that provides people around the world the ability to eat comfortably and have a roof over their heads.

Works Cited

Litan, Robert E. “The ‘Globalization’ Challenge: The U.S. Role in Shaping World Trade and Investment.” Brookings, Brookings, 28 July 2016, www.brookings.edu/articles/the-globalization-challenge-the-u-s-role-in-shaping-world-trade-and-investment/.

“The Benefits of International Trade.” U.S. Chamber of Commerce, 15 Jan. 2021, www.uschamber.com/international/international-policy/benefits-international-trade.

“The U.S. Trade Deficit: How Much Does It Matter?” Council on Foreign Relations, Council on Foreign Relations, www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it-matter.

How to Save Money

 How to Save Money

by Carmen B.

Since the covid-19 pandemic, the majority of people find themselves trying to save money. I used to spend every dollar of my paycheck on short satisfactory things like an everyday coffee when I realised I should be saving all that money. These tips really helped me when it comes to saving so take them into consideration!

1. Review Spending Habits

The first tip to saving money is analyzing your spending habits. By reviewing your monthly bank statements, you can analyze your spending, whether it is spent on daily coffees or any other unnecessary expenses. You can identify areas where you need to limit spending.

2. Budgeting and Saving Apps

There are many apps that can help budget your spending and save money. Each app is unique and provides a different experience best for the user. Some trusted apps are:

Digit: Best for optimizing savings decisions

Dobot: Best for price

Qapital: Best for those who are motivated by visuals

Long Game: Best for a game-like experience

Simple: Best for competitive APY with auto-savings features

Chime: Best for those who want their bank app to save their spare change

Current: Best for young adults seeking a banking alternative

Acorns: Best for novice investors

Keep in mind you will need to enter your banking data for these apps. Another important thing to keep in mind is to always have a balance with more than enough money to avoid getting an overdraft fee!

3. Using Coupons

There are many ways to save money using coupons. Yes you can find paper coupons to save at the store but on nearly every online store, there is a promo code you can use to save money. You can look up these codes or download apps like Honey or Coupert to find deals.

4. Challenge yourself to freeze your spending

This tip is very simple yet very hard to do. By only buying necessities and freezing your spending. Think of it as a diet and you're cutting out your sugary and fatty foods. When doing this you will see how much you are spending when the money is adding up. 

Works Cited

McMillin, David. “How To Save Money: 14 Easy Tips.” Bankrate, www.bankrate.com/banking/savings/how-to-save-money/.

Wisniewski, Mary. “8 Best Money Saving Apps.” Bankrate, www.bankrate.com/banking/savings/best-money-savings-apps/. 

What causes a stock to gain value?

 What causes a stock to gain value?

Written by: Zach B. 

Growing up as a kid you’re always told, “Invest while you’re young,” and “save while you’re young.” But they never tell you the details. They never tell you what to invest in, how stocks gain and lose value, the basics of investing. Well I’m gonna zero in on one thing about investing and that is how a stock gains its value. Lot’s of factors can manipulate a stock's value on the market but in recent years supply and demand, inflation, and company news seem to have the biggest effects. 

How Supply & Demand Affects a Stock Price

When the interest in a stock is high and a lot of people are buying that specific stock the prices go up because demand is breaking supply levels. For example bitcoin, thousands and thousands of people were mining and buying bitcoin in the mid 2010’s and now look where it’s at.  As of 9:51 pm on May 4th, Bitcoin is sitting at $55,005.86 which is about a $30,000 increase from 2016. Demand kept raising so the price rapidly rose alongside the demand. When a stock holds a low demand the price crashes because people practically have deadstock sitting around in their portfolios. The stock is continuously losing value as people sell it at cheap prices instead of having it sit around. 

How Inflation Affects a Stock Price

Inflation negatively affects growth stocks and positively affects value stocks. If you’re wondering what both of those are let me quickly explain. Growth stocks are stocks you invest in while they are cheap and sit on them eventually till they become what you expected the stock to become. Value stocks on the other hand are bought and sold quickly to make as much profit as you can. Basically flipping the stock to put it in simplest terms. Inflation negatively affects growth stocks because interest rates rise to defend the increasing inflation which causes that negative effect. For value stocks the income is there because of the raise in stock prices. They most likely bought for cheaper than what they could potentially sell it off for.

Why Company News is THE biggest Factor on Stock Price

Company news to me is what creates the demand for the stock, product, service, whatever you wanna call it. If your company is sitting in the ducts with absolutely no coverage, no specials, no collaborations, nothing that will create news the demand of the stock will never be there. Stock brokers and investors aren’t going to invest in a stock that lacks attention, growth and effort to create demand. I don’t wanna go back to crypto currency but I have to. Dogecoin is a prime example of how company news is the biggest effect. Only reason there are eyes and demand for the crypto currency is because of Elon Musk fully backing the stock and taking every opportunity to advertise the stock. Dogecoin is projected to reach new highs after Elon Musk’s appearance on Saturday Night. That’s just one example of company news affecting a company's stock price and there’s plenty more feel free to look them up.

Works Cited

Sigalos, MacKenzie. “Elon Musk's Upcoming SNL Appearance Is Fueling Dogecoin's Rise, Says Analyst.” CNBC, CNBC, 4 May 2021, www.cnbc.com/2021/05/04/dogecoins-price-is-rising-ahead-of-elon-musks-snl-appearance-.html.

Wayman, Rick. “Short and Distort: Bear Market Stock Manipulation.” Investopedia, Investopedia, 15 Jan. 2021, www.investopedia.com/articles/analyst/030102.asp#:~:text=Short%20and%20distort%20(S%26D)%20refers,price%20of%20the%20targeted%20stock.

“What Causes Stock Prices to Change?” What Causes Stock Prices to Change? | Desjardins Online Brokerage, Desjardins Online Brokerage, www.disnat.com/en/learning/trading-basics/stock-basics/what-causes-stock-prices-to-change#:~:text=Stock%20prices%20change%20everyday%20by%20market%20forces.&text=If%20more%20people%20want%20to,supply%20and%20demand%20is%20easy.

Zucchi, Kristina. “Inflation's Impact on Stock Returns.” Investopedia, Investopedia, 19 Mar. 2021, www.investopedia.com/articles/investing/052913/inflations-impact-stock-returns.asp. 

How Credit Unions Help Raise Credit Scores

 by Connor C.

Credit unions were becoming more popular throughout the years, but recently slowing down and are projected to get worse in the next 2 years. Always pick the right bank for you as a credit union isn’t for everyone. However, I’m here to show more of the benefits on how a credit union can help raise your credit score and maybe even make people reconsider their choice of bank.

Credit-Builder Loans: Credit unions like to fix damaged scores through the credit-builder loans. A credit builder loan typically holds the amount borrowed from a previous loan while you continue to make payments, which builds your credit. People like to see credit-builder loans as a “Fresh Start” or “Starting Over” as you technically are restarting over your previous mistakes. The only thing that is restricted when under a credit-builder loan is that the money that is being held back can’t be accessed until you have fully repaid the loan, which means you can build savings and your credit score at the exact same time. Ways you can help yourself manage a credit-builder loan are ways like making payments on time, monitoring your credit score, picking the right type of credit-builder loan, and deciding what to do with any interest.

Get Free Credit Counseling: Credit Unions are always willing to help those out that need to be more educated on budgeting and using tools with the goal to help reduce and completely eliminate debt. It’s just not debt as well, it also helps with developing a budget, how to get copies of your credit report/scores, and helps you organize a plan for any future debts. It’s extremely easy to get access to a credit counselor, typically you just access the credit union’s website and either decide to go through an in-person meeting, internet, or over the phone.

Take Advantage of Online Tools: The online tools that credit unions let you have access to are really beneficial in helping you with certain tasks. Online banking is so much more convenient than having to go to a physical bank as you aren’t restricted in the time frame. You no longer need to wait in lines as we know everyone doesn’t like lines, and lines are actually some of the reasons why people dislike going to the bank. You also get instant access to your transactions and account history which can be useful for both watching over your transactions to help you manage your money, and also pointing out any false transactions that you can bring to the bank’s attention. It makes it easier to pay bills on time which in the end improves your credit score. Last but not least, the ability to transfer money between accounts is an extremely useful thing to have when you’re older or anytime.

Establish Credit With Secured Cards: Usually with a secured card it’s not a long-term commitment, and its purpose is for you to improve your credit score to qualify for better options in terms of loans, cards, etc. Eventually, you’ll move up to an unsecured card which can get your deposit back. It’s important to consider choosing the right secured card that fits you best. Again the purpose of a secured card is to help you build credit, but that can’t happen if it isn’t toward the credit bureau which is just companies that handle the credit reports that form the basis of credit score. Always look at the reasonable fees, path to an upgrade, and a deposit you can afford when considering a secured card. Usually after 630 credit score is when you are able to apply for an unsecured card which converts into a regular credit card.

Hopefully, I might have made you consider switching or starting with a credit union. Overall, these are key takeaways to what makes a credit union so beneficial for your credit score and how it can raise it in the long run. Credit unions can hopefully make a comeback in growth in the future as the projected growth doesn’t look too good.

Works Cited

“5 Ways Joining a Credit Union Can Help Build Your Credit.” Spero Financial, 8 Nov. 2020, spero.financial/5-ways-joining-a-credit-union-can-help-you-build-your-credit/.

McCarthy, Ken. “Credit Unions Turn to Digital Outreach as Membership Growth Slows.” American Banker, American Banker, 23 Feb. 2021, www.americanbanker.com/creditunions/news/credit-unions-turn-to-digital-outreach-as-membership-growth-slows.

O'Shea, Bev. “What Is a Credit-Builder Loan?” NerdWallet, 15 Apr. 2021, www.nerdwallet.com/article/finance/what-is-credit-builder-loan.

Soucy, Paul. “How to Build Credit With a Secured Credit Card.” NerdWallet, 26 May 2020, www.nerdwallet.com/article/credit-cards/build-credit-with-secured-credit-card.

Steps you can take to Avoid Credit Card Problems

by Jada B.

 Oh no! You're out shopping with your friends and suddenly your credit card gets declined! You quickly call your bank provider and soon learn that you have maxed out your credit line (the amount you can spend) and you have a missing a credit payment. Suddenly you are charged with a penalty interest rate and fees which not only cost more, but lowers your credit score if you are not following through with your payments. Here I am going to help you avoid these problems that some may experience when owning a credit card.  

If you are trying to avoid debt or get out of it, making debt elimination a priority is something that can benefit you financially. According to ZenHabits.Net, If you save your paychecks in your checking account for a month and only use your credit card for emergencies then you could set a budget lower than your monthly pay which will not only help you pay off your debt on time, but will also help you save your money. Building your credit score can allow you to take out loans later for emergencies, and allow you more money and time to pay it back. If you don't already, setting an overall budget with your credit card can benefit your credit score and help avoid credit card problems

Many people make impulsive purchases so they can get an item right away. Making sacrifices and buying with only cash can really benefit your credit line and the amount that you need to pay off. For example, if you are shopping and want to buy a pair of shoes that cost $50.00, it is totally possible to save up $50 in cash to buy the shoes later rather than charging your credit card right away. Saving up for an item that isn't necessary in cash can really help you limit the overall amount of impulsive purchases and can provide more balance on your credit card. This will allow you to not have to pay off as much by the end of the month.

Avoiding a credit card cash advance at all cost will really help you stay out of credit card debt. According to TheBalance.com, all Americans in total carry around $4.2 trillion in credit card debt. A lot of this debt is caused by card cash advantages, which is basically like taking out your own loan at an ATM. Doing this will require you to pay a “cash advance fee” which is more expensive than a regular ATM fee because credit cards are most likely to be priced differently. Overall, cash advantages are one of the most expensive types of credit card transactions and is something you should try hard to avoid.

6 Habits to Overall avoid credit card problems:

1. Read the fine print of your credit card and understand your limits.
2. Stick with having only 1 credit card. You don’t need to pay off more than you already have to.
3. Don't miss any monthly payments
4. Keep track of your credit card purchases
5. Stay on top of the budget that you should create for yourself.
6. Think before buying. “Is this something I really need?”

Works Cited

Irby, LaToya. “Why You Should Never Get a Credit Card Cash Advance.” The Balance, 30 July 2020, www.thebalance.com/why-you-should-avoid-a-credit-card-cash-advance-960036.

Little, Kendall. “7 Reasons Credit Cards Are Declined.” Bankrate, www.bankrate.com/finance/credit-cards/reasons-credit-card-declined/.

Staff, FindLaw. “Avoiding Debt.” Findlaw, 16 Apr. 2021, www.findlaw.com/bankruptcy/debt-relief/avoiding-debt-credit-card-do-s-and-don-ts.html.

Methods to the Madness: Building Credit

 by Riley C.

Let's say you just got your first credit card, and want to build up your credit score. You know it is important to do, but don’t know how to do it. We if that’s the case for you, you’ve come to the right place. Today I will inform you about why credit matters, how to build good credit, and how to avoid losing credit.

Why is credit so important?

You may look at your credit score and think to yourself, “It's just a number, how and why does it matter?” Well, your credit score is basically a sum of the history of your spending. A good/high credit score means you have been responsible, while a bad/low credit score means you are rather irresponsible. Many important people may look at your credit score, such as Mortgage Lenders, Potential Employers, Landlords, Auto Loan givers, etc… If you want to access these services, a good credit score is essential for the best experience. Furthermore, having a good credit score will help you to live an easier, less stressful life.

How do I increase my credit score?

There are several ways to do this. One of the first important ones is to look at your credit reports. Knowing your credit history can make it easier to increase your credit, by letting you know what helps and hurts your credit score. (You should also watch for fraudulent activity, as that could lower your credit score without you knowing why.) Secondly, and very importantly, is paying your bills on time. According to Investopedia, payment history has the biggest impact on your credit score, especially for FICO credit scores, which are used by more than 90% of top lenders. Being responsible and paying your bills on time will help to massively build your credit. To add another level to that, keep your usage at 30% or less of your total credit limit, and make sure to never go over your limit. A simple rule of thumb is to be able to pay off your entire balance each month.

How do I prevent my credit score from going down?

There are several ways in which your credit score can drop, which is always a bad feeling. The big one is if you fail to make a payment on time. This hits you with the triple whammy, that is: 

• You still owe the money

• You have just encountered late fees

• Your credit score has dropped. 

Avoiding this problem is essential. If you can’t pay off the full balance, which is the best case scenario, then be sure to always make the minimum payment on time. 

In Conclusion:

While it is relatively easy to increase your credit score, it is much, much easier to lower it. Paying careful attention to what actions you take, and planning ahead will greatly help you in the long run. Following these tips, and doing your own research, will enable you to build an excellent credit score!

Works Cited:

Irby, LaToya. “Reasons Why Having Good Credit Is Important For Modern Living.” The Balance, 31 Aug. 2020, www.thebalance.com/reasons-why-good-credit-matters-960178#:~:text=A%20good%20credit%20score%20is,able%20to%20pay%20their%20debts. 

Lake, Rebecca. “Want a Better Credit Score? Here's How to Get It.” Investopedia, Investopedia, 5 Apr. 2021, www.investopedia.com/how-to-improve-your-credit-score-4590097. 

Proctor, Written by: Clint. “Why Did My Credit Score Drop?” Credit Karma, 14 Apr. 2021, www.creditkarma.com/advice/i/credit-score-drop. 

Purchasing a Home

 by Morgan G

Although we all wish we could escape the real world, at some point in our lives, most likely, we will be purchasing a home. Whether that’s buying a house, renting an apartment, leasing a condo, etc. Before purchasing a home, there are many things necessary to know in order to be financially prepared. 

The first step to purchasing a home is deciding what type of housing best fits your lifestyle and what is most practical financially. Buying a home is an extremely large commitment. Before you are ready to purchase a home it is important you think about whether or not it's affordable and compatible with your lifestyle. Most of the time, buying a house will pay off financially, only if you live in it for five plus years. If you don’t think this is the right fit for you, there is nothing wrong with leasing or renting a home. A common misconception is the difference between leasing and renting. Generally, when you lease something it lasts for roughly 12 months, but when you rent something it is every month/30 day payments. It is important to be feasible financially as well. Buy a home that you can afford now, not that you can afford in a few years because money being made is not guaranteed. In order to do this, you could start by taking a look at your DTI ratio. This is your Debt-to-mortgage income. According to Investopida,  “Before clicking through pages of online listings or falling in love with your dream home, do a serious audit of your finances. You need to be prepared for both the purchase and the ongoing expenses of a home.” Taking into consideration the affordability and proper living space is an essential part of picking out your first home. 

Another important factor in purchasing a home is getting an approval for a mortgage. A mortgage is a “secured loan” used while financing property. A tip that isn’t necessary, but that would be helpful is to try and save 20% down payment for the mortgage. This would mean you don’t have to pay PMI insurance (mortgage insurance). You only need a mortgage when buying a house, not renting or leasing. That being said if you are renting or leasing an apartment, condominium, house, etc this step is not needed. 

The next step while your mortgage is processing is finding the perfect home. Knowing location, price, space, etc are all extremely important factors. One thing you should do is find a real estate agent. These agents are trained professionals and help you buy rent and sell properties. They do this by becoming knowledgeable about their client’s wants and needs and with that, conducting walkthroughs, and providing assistance during the buying, renting, and leasing process. They will help you find a perfect home for your specific needs. 

The final step of renting or leasing a home is signing your lease. Your lease is the contract between you and the landlord. It takes you through the certain conditions that have to be agreed upon in order to live on their property. This includes anything from the length of the tenants stay, and the regular amount due, to conditions of no pets. When you sign the lease that means you will abide by the rules and regulations. If this is broken, you can face immense penalties depending on the severity of the offense. When both parties (the tenant and landlord) sign the lease that means that the contract is considered bound and you are good to move in. 

There are a few different final steps to purchasing a house depending on your specific process (because each one is different). Making an offer is the first step. Before this the lender will want to see a few different things. According to Rocket Mortgage, “Your lender won’t just want to see how much money you make. They’ll also want to see a work history (usually about 2 years) to make sure your income source is stable and reliable.” Just as we have been talking in class, they will also want to see your credit score. That being said, if your offer is accepted, you can move on. If your offer is rejected you can choose to make a different offer or move on to another house. The seller can also come up with a counter offer. They could change the purchase price or terms of the offer. You may negotiate for a long time. It all is dependent upon the seller. A non necessary step, but a great tip once your offer is accepted is to get a home inspection. This is where there will be a walkthrough of the home to check if there are any problems. Whether it’s a simple clogged sink, or a more serious electrical issue. 

The last couple steps of purchasing a home is getting a home appraisal and closing on your new house. Starting off with a home appraisal. A home appraisal is an evaluation of the current price and value of the property you are buying. The reason lenders have to do this is because they aren’t allowed to lend out more money than the home is worth. Roughly three days before your specific closing date, your lender will give you a closing disclosure. This outlines the final terms, conditions, and final cost of the mortgage. After you go to one final meeting with your lender you’ll sign a final settlement statement, and the house is all yours. 

Every process of buying, leasing, and renting a home is different. Therefore all of the information I provided isn’t all that you need to know while figuring out a home, but it is a great baseline. I hope this helped you to gain an understanding of information that will be useful in your future home buying. 

Works Cited

“Buying A House In 2021: A Step-By-Step How-To.” Rocket Mortgage, www.rocketmortgage.com/learn/how-to-buy-a-house.

Fontinelle, Amy. “First-Time Homebuyer's Guide.” Investopedia, Investopedia, 21 Mar. 2021, www.investopedia.com/updates/first-time-home-buyer/.

Marie, Jenna. “The Advantages of Leasing a House.” Home Guides | SF Gate, 17 Nov. 2020, homeguides.sfgate.com/advantages-leasing-house-55647.html#:~:text=Leasing a home requires only,requires a substantial down payment.

Payne, Kevin. “What Does A Real Estate Agent Do?” Rocket Homes, Rocket Homes, 17 Mar. 2021, www.rockethomes.com/blog/home-buying/real-estate-agent-do.

“What Is A Mortgage? The Basics For Beginners.” What Is A Mortgage? The Basics For Beginners | Rocket Mortgage, www.rocketmortgage.com/learn/what-is-a-mortgage#:~:text=A mortgage is a type of loan that's used to,that they stop making payments.

Choosing a Bank

 by Nico G.

How to Choose A Bank

When choosing a bank there are many things to consider, but here are just a few very important things to look into while choosing. You want to look into the types of accounts offered. Can you have a checking account, savings account, getting information about their credit cards. Knowing this information is just one of the many things you need to know when choosing a bank. There is also no limit to the amount of accounts you can have so feel free to personalize your accounts the way you want and/or need. 

Another thing to look into is the fees and rates. Some banks might charge fees for your monthly maintenance such as your ATM usage, overdrafts, and transferring money into account(s). Each place is a little different so the list could be longer relating to fees and rates. Look into whatever bank you choose a website to get information on their rates and fees schedule, if you're not able locate them on their website call and ask. 

Being able to look at your account on your bank's app is the easiest place to look. Your ability to transfer money to friends and family if needed is an important feature that anyone should have and want, making your life a whole lot easier, and being able to do this, getting your bank's app is the way to go. If you want the most recent technology, look more into national banks, online only banks, and mobile banking. 

The most important thing to consider is your money safety. You don’t want to lose money and you want to keep track of your money at all times. Look for banks whose deposits are protected by Federal Deposit Insurance Corp. or credit unions whose deposits are protected by National Credit Union Administration. Both of these federal agencies insure balances of up to $250,000 if the bank or credit union fails to protect your money. 

7 Critical Factors to consider when choosing a bank

Scope security when choosing your bank

Is the account you're looking for available?

Hidden fees, annual fees, Transfer fees

Varying Interest rates

Cash Limits

Online Banking 

Honesty/Trust

Knowing these things allows you to have better control over your income and outcome. Best way to do that is looking into these 7 critical factors I have shown you and learning what they’re all about. 

What are some of the best banks to choose from?

Ally- Over all the best bank

Chase- Best Customer Service

Wells Fargo- Best for teenagers

Simple- Best for College Students

Capital One- Best for Millennials

USAA- Best for military members

Charles Schwab Bank- Best for international travelers 

Capital One Spark Business- Best for small business

Works Cited

You Are Being Redirected..., www.signaturebankga.com/7-critical-factors-to-consider-when-choosing-a-bank/.

Lambarena, Melissa. “How to Choose a Bank.” NerdWallet, 3 Dec. 2020, www.nerdwallet.com/article/banking/how-to-choose-a-bank.

Rosenberg, Eric. “The Best Banks of 2021.” The Balance, 22 Feb. 2021, www.thebalance.com/best-banks-4165386.